Good afternoon, welcome to LogicMark's first quarter 2026 conference call. The speakers today are Chia-Lin Simmons, Chief Executive Officer, and Mark Archer, Chief Financial Officer. During this call, management will make forward-looking statements, including statements regarding LogicMark's future performance, operational results, and anticipated product launches. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For more information about these risks, please refer to the risk factors described in LogicMark's most recent filed annual report on Form 10-K, subsequent periodic reports filed with the SEC, including Form 10-Q, and the press release issued in connection with this call. The information discussed on this call is accurate only as of today, May 13th, 2026. Except as required by law, LogicMark undertakes no obligation to update or revise any forward-looking statements.
It is now my pleasure to turn the call over to Chia-Lin Simmons. Please go ahead.
Good afternoon, everyone, and thank you for joining us today. I'm pleased to report that our 2025 financial and strategic momentum continued into the first quarter with year-over-year revenue growth. Demand from our VA partners and our B2B distributor and resale channels remain healthy. Compared with the first quarter of last year, gross margin expanded, operating expenses declined, and our operating loss narrowed. The first quarter financials validate the business model we have been pursuing, delivering improvements in operational performance by offering solutions that meet the needs of families. LogicMark has been steadily evolving from a personal safety hardware company into a connected care platform, with newly introduced products and a pipeline designed to accelerate that transition. We continue to operate in a growing care and safety economy where the need is large, urgent, and increasing. Falls remain one of the most serious safety risks facing older Americans.
The CDC reports that falls are the leading cause of injuries for adults 65 and older, with more than 14 million, roughly one in four, reporting a fall each year, many requiring medical treatment or restricting activity. The CDC's STEADI initiative, that's Stopping Elderly Accidents, Deaths, & Injuries, put the urgency plainly. Every second, every day, an older adult falls, and approximately 41,000 die from a fall each year. The economic burden is equally significant. The National Council on Aging projects that the cost of treating non-fatal older adult fall injuries will exceed $101 billion by 2030. That reinforces why fall detection, personal emergency response, and connected caregiver notifications are not convenience features. They address a large, reoccurring, and costly safety challenge for older adults, families, caregivers, and the healthcare system. The demographic background amplifies the opportunity.
Approximately 4 million Americans were estimated to turn 65 each year from 2024- 2027. In 2024, the U.S. population aged 65 and older reached 61 million. This was up 3.1% from 2023. Surveys indicate that most adults aged 50 and older wanna remain in their current homes, and one in four Americans aged 65 and older already live alone, underscoring the need for technologies that preserve independence while giving caregivers greater visibility and confidence. I share these statistics because taken together, they capture the scale, urgency, and real-world importance of the need LogicMark is addressing. The trends indicate how older Americans want to live. The market is shifting from traditional emergency response devices to connected care solutions that combine fall detection, remote monitoring, instant caregiver alerts, and AI-enabled insights.
Our connected care platform is built for the transition, integrating IoT devices, AI-powered sensors and services to enable safer and more connected care. In addition to the industry backdrop, what gives us conviction in our strategy is our growing installed base, a track record of reliability, and a procurement relationship that very few companies in our space can match. An indicator of the success of our strategy can be seen not just in our financials, but also in our first quarter net promoter NPS score, which finished at 68. For healthcare specifically, benchmark reports show how many respected healthcare device-related companies land in the 40-60 range, with only standout performers consistently above 65. We strive to remain one of the best performers in the industry and to continue our reputation for great service to our customers.
Feedback such as, "This LogicMark device works perfectly and gives me peace of mind," or, "The product exceeds all my expectations." "I accidentally activated my alert and was responded to immediately and with professional help when I needed it." "I can't say enough for the excellent attitude of their organization." "Completely satisfied with the design and quality. I actually enjoy using it." These are just a few of the comments from customers that not only demonstrate our support during the most critical moments, but also indicate we are heading in a right strategic direction. We are continuing our focus on providing the best-in-class product and services. That focus includes layering a software-defined connected care platform onto the technology foundations we have built.
Our development is grounded in proprietary AI-powered sensors and monitoring, token-based data privacy, and an expanded connected IoT ecosystem, with our patent portfolio providing a strategic advantage over competitors. It is important to be clear about the role AI plays on our platform. We're not building a chatbot companion for older adults. The people we serve do not want artificial empathy. They want their families. What AI does well is process longitudinal patterns and minute changes in behavior that humans might not easily detect, changes in activity, sleep, steps per day, medication adherence, and surface those patterns to caregivers in time for human empathetic decisions. That is the role that we have designed AI to play in a LogicMark platform. Here's a simple example of how AI can work. Currently, our platform is designed to learn a user's normal routines and activity patterns.
A fall-like signal at 10:00 A.M. during a regular activity such as a yoga class may mean something very different from a similar signal at 3:00 A.M. in a bathroom. By interpreting context, the platform can help prioritize events that may require faster caregiver awareness and response. The personalized digital twin is a behavioral model that compares patterns over time and helps surface meaningful changes earlier. It also helps support our strategy to expand beyond one-time device sales into subscription cares, connected care services, and selective licensing opportunities. We are building on a strong foundation across government, healthcare, dealer, reseller, and consumer channels, and expanding engagement with senior living and independent living partners. Our renewed five-year GSA contract, awarded in February, extends the federal procurement relationship that originated in 2021 and remains a durable foundation for our government channel.
These relationships matter because innovation only creates value when it reaches people, families, caregivers, and organizations that need it. With that in mind, let me turn to the product pipeline and innovation work that supports the next phase of our strategy. We're excited about the expansion of our product portfolio, and as previously mentioned, we have two near-term product catalysts. First, we plan to launch a wearable watch this year. That watch will combine fall detection, geofencing, activity tracking, medication reminders with new advanced biometric data capabilities. Second, our connected home hub continues in beta with senior living and independent living partners. It combines our CPaaS platform, predictive cloud services, caretaker app, and proprietary AI-powered fall detection into a background system that does not require the user to wear a device in the home.
This is important because many in-home falls occur in bathrooms and showers where wearables are often removed. Feedback from beta partners have been encouraging. We're using it to refine features that matter most to facility operators and clinical teams. Together, the watch and the hub are designed to operate as a single integrated ecosystem. A caregiver does not need to manage multiple apps and services to keep their loved ones safe at home and on the go. As a reminder, our installed product portfolio also includes the Freedom Alert Max, an attractive two-in-one device that combines a cell phone and medical alert with integrated medication reminders and proactive activity tracking. With a single device, customers can stay connected with family while we deliver on our broader strategy to move from reactive alerting to proactive data-driven care.
The Freedom Alert Max's feature set is designed to drive adoption by giving customers everything they need in one product with a single purchasing decision. While seniors remain our core market, we have also seen meaningful demand for our Aster personal safety platform from a different demographic, college students, young professionals, and especially women seeking discreet personal safety solutions. Aster has expanded the addressable market for the LogicMark platform beyond aging-in-place use cases, reinforcing the breadth of the safety and care economy we're positioned to serve. From college students to seniors aging in place to veterans transitioning to independent living, we are addressing the needs of several generations. Our team has worked hard to make our product and technology relevant. Today, LogicMark solutions emphasize reliability, simplicity, and caregiver peace of mind, the attributes that distinguish purpose-driven systems from general consumer safety products.
As we are taking a category that frankly has not evolved meaningfully since the 1980s and bringing it to the 21st century with IoT, AI, and machine learning at its core. Looking ahead, we are focused on three priorities. Scaling distribution across healthcare, government, and B2B channels, bring our next generation products to market on schedule, and protecting profitability through pricing, productivity, and disciplined cost management in a dynamic macro environment. With that, let me hand the call over to Mark to walk you through the financials in more detail. Mark?
Yeah. Thank you, Simmons, and good afternoon, everybody. I will walk through the first quarter 2026 results and close with a few comments on the balance sheet, our liquidity position, and the trajectory from here. First quarter revenue was $3.2 million, up 24% from $2.6 million in the prior year period, exceeding our expectations. Growth was driven primarily by continued strong demand for the Freedom Alert Mini and the upgraded Guardian Alert 911 Plus. Gross profit was $2.2 million, an increase of 36% compared with $1.6 million a year ago. Gross margin was 69.6% compared with 63.5% in the first quarter of 2025, an expansion of 610 basis points.
These numbers reflect the impact of a price increase implemented in late January, a favorable product mix, and lower shipping and fulfillment costs. Total operating expenses for the first quarter were $3.7 million, down 7% from $4 million in the prior-year period. We remain focused on disciplined cost management as we scale the business. More specifically, advertising costs decreased by approximately $100,000 or 55%, reflecting a deliberate reduction in business-to-consumer media spend. At the same time, selling and marketing expenses increased by approximately $300,000, driven by additional sales personnel and related costs supporting our healthcare, government, B2B, and reseller channels. Overall, these go-to-market expenses increased year-over-year, but the mix shifted towards sales capacity and channel infrastructure, which we believe can support more durable revenue growth over the long haul.
Research and development expense declined approximately 21% year-over-year. We don't view this as a budget cut, but rather a reflection of where we are in the product development cycle. The platform architecture and core product roadmap have already been built. We are now in a commercialization phase where the highest return investments are in sales, channels, and consumer-facing systems, not substantially higher R&D spend. General and administrative expense decreased by approximately $500,000 or 24%, driven by lower stock-based comp, consulting, and legal costs. Operating loss for the first quarter was $1.5 million, an improvement of 36% from an operating loss of $2.4 million in the prior year period. We're pleased with this meaningful progress against our overall objective of reaching break-even profitability.
Net loss for the first quarter was also $1.5 million, an improvement of 34% from a net loss of $2.2 million in the prior year period. Net loss attributable to common stockholders was $1.68 per basic and diluted share, compared with $93.50 per basic and diluted share in the prior year period. Those prior year figures have been adjusted retroactively to reflect the one for 750 reverse stock split that we completed in October of 2025. We ended the first quarter with $7.5 million in cash and investments and no long-term debt. The first quarter reflected the planned investments in product development, sales infrastructure, and working capital needed to support our growing top line.
Our liquidity position supports our ability to fund the continued commercial build-out of the platform, the launch of the wearable watch in the third quarter, and the continued progression of the connected home hub through beta and into commercial development without near-term reliance on dilutive financing. I also now want to address our OTC listing, as we've had a number of questions come in about our long-term stock exchange and capital market strategy. Our current focus is on executing against our business plan, improving operating performance, and preserving flexibility while always evaluating the best path to create long-term shareholder value. We will communicate any material developments when appropriate. In terms of financial performance looking forward, we expect ongoing expansion of subscription monitoring and digital care features integrated into our AI-enabled care and analytics platform to further strengthen our recurring revenue base over time.
Consistent with the framework we shared on our last call, we're managing operating expense growth conservatively, supported by AI-driven productivity initiatives that have already begun implementing across the company. With that, I'd like to open the call up for questions and turn this back to the operator.
Thank you. To ask a question, please press star one one on your telephone, wait for your name to be announced. To withdraw your question, please press star one one again. Our first question will come from Marla Marin with Zacks. Your line is open.
Thank you. A lot of questions, but I obviously won't ask everything that's on my mind. You've had several sequential strong quarters now as you continue to introduce new products to upgrade the existing products portfolio. Now, Mark, you talked about how R&D is not, you know, stepping back from investing in the portfolio, but you're at a different stage now. Is it right to think that R&D could be kind of lumpy over the next few quarters as you know, you introduce the watch and introduce other products that have been in development, but then again come back for additional upgrades down the road?
Yeah, we're trying to not have it be lumpy, Marla. You know, we have a very well-thought-through development schedule. We re-review it every month. No, I don't. You know, the spend is roughly $100,000 a month, and it's been pretty consistent over time, and I see at least in the near term, it staying pretty consistent.
Okay. That makes sense. Switching gears. I'm, you know, wondering if we could get a little bit more color on the watch because I think that that will be a very interesting product launch. Is there a specific demographic that you're thinking of now when you're thinking about the watch, or do you think that it extends across a very broad age group and demographic?
I'll go ahead and take that, Mark. Related to the watch, I think that it is a really, quite candidly, a senior product. This is not something where I necessarily see the watch as something that's extendable into a younger audience set. Mainly because I think that, you know, there are preexisting products that work well in that category area. For example, you know, if you're wearing a watch, you might wear a Fitbit, right? You might wear an Oura Ring. I mean, our product is very focused on delivering first-in-class fall detection, right? Geofencing for early memory care and Alzheimer's patients. By having that form factor, for example, it makes, you know, people wear it and forget it.
If you're a wanderer from a memory care and Alzheimer's perspective, that's a perfect sort of, you know, product to have on your body versus something that might be lanyard-based, for example. The features and sort of, you know, products there that we're launching with that flagship product, you know, is really tied to more senior-oriented demographics. We have, you know, our activity tracker. We have, you know, medicine reminder, all of those core features that we're seeing in our, you know, Freedom Alert Max flagship. Plus sort of additional features that include, you know, biometrics data that's really great for sort of helping us further get ourselves to that predictive care modeling work because we want to be able to utilize that data and services to help us prevent that second fall or hopefully even that first fall.
I don't see us, you know, necessarily doing that. Again, our customers, candidly have always surprised us. You know, Freedom Alert Max had strong interest in people who had kids, you know, that's earlier than 12 years old, and they don't wanna give them an iPhone because there's, you know, geofencing, GPS tracking, 24/7 monitor service. If you wanna give your kids a phone for emergencies, and we do have a lot of concerns in safety cares out there for young kids walking for the first time to school, they've repositioned that product for that service, right? They're less concerned about the fall detection service that we're providing there.
I think similarly, as we launch into the market, we do have a core demographic in mind that we think really need this product and need a really good product in that particular sector that is, I think, price sensitive for that care. We're not talking about an $800, $900 Apple Watch here, right? Do I think that, you know, other sectors may pick it up? I think that, you know, as we go into the market, we will see whether or not it resonates with the other side of the sandwich, for lack of a better word, right, in the sandwich generation.
Two follow-up questions on that, if I may. Chia-Lin Simmons, you said that, you know, you've been surprised in the past about products being adopted by a group that you hadn't originally expected or targeted? How easy, how easily could you adapt a product or take the features of a product and, you know, put them in a different type of form factor that makes them even more attractive to that new demographic, one, you know, a demographic you perhaps had not originally thought about when you first designed the product?
I think that's a really good question. I think that, you know, first and foremost, I think the reality, I think that all of us face is that it's the one in three millennial and more than half of Gen Xers, the sandwich generation caretakers who are purchasing these items for their elderly loved ones. Because they are sandwich generation caretakers, when they look at these products, they're typically the ones like thinking like, "Well, this looks great, but couldn't I give this to my eight-year-old too, as well as my father for this Freedom Alert Max product?" In many ways, they're already seeing, without us actually having to change any real features at all, like the use of that. If you look at how our products work, fall detection is additional subscription service.
If you choose not to turn on fall detection, the product does not require any remodeling and potential sort of reconfiguration for use for someone who is younger, and you could just put in geofencing for an eight-year-old child, right? That sort of doesn't really require a lot of reconfiguration. When we first launched the Aster product, the idea was that, you know, we were looking at very young, active seniors who already have ginormous iPhones or, you know, Pixel phones, right? They just want something that's convenient and easy to hold in their hands while they have those products in their pocket and they're out walking their neighborhoods, right?
It turns out that, you know, as people were buying that for their elderly active parents, you know, they were seeing the use for their college students, you know, going off and walking dark paths at night in the college, right? We really haven't done so much configuration change. The reality also is our system is modular. Because we created a cloud-based platform, Communications Platform as a Service, our services tend to be modular, and they allow us to adapt different sort of services and changes to the platform easily, which is why you saw the heavy investment early on in the days of when we were building from an R&D perspective because we created a platform that we made to be flexible for growth and partnerships and all of those things.
Okay. Taking, you know, that discussion a little bit further, you know, you've talked in the past about the licensing opportunity. Are some of the features that we are going to see with the fall detection and others on the watch and other, you know, near-term upcoming launches, are those features that you think would easily lend themselves to a licensing model?
Absolutely. Look, we have a very robust patent portfolio that lends itself well to licensing our first-in-class, you know, patents in AI, machine learning, and any number of sort of fall detection and other category areas to partner with other technology or consumer partnerships. We actually have built the infrastructure so that we actually can white label our services, any segments of our product and actually white label it for your products and hardware and services as well. We did that deliberately because our core background as technologists is that we've worked on things such as connected cars in the past. We knew that we had to work with the Porsche and the Honda and the Subaru of the world, we had to make things easy and modular and easy to license in parts.
We have configured all of our products to be very thoughtful about that. We build on core infrastructure that is easy for other people to integrate. Excuse me. Yes, and we are active in that category area right now to license our technology.
Okay, great. Last question. You know, the original, you know, goal that you outlined was to move from a, you know, sale of devices, of hardware into a recurring revenue model that, you know, had the technology as a large part of the overall revenue base. Where do you think, you know, where do you think the subscription model starts to play into that goal? Because I'm thinking that at this point you're still in early stages.
I mean, we're definitely seeing a product shift mix. You know, we have in the past been traditionally a unmonitored type of service with no service layer on top of it and no recurring. We're slowly seeing that, you know, we're seeing a good shift in terms of, you know, our partners and customers purchasing the connected products and services. I think we're already seeing that shift already. You know, nowadays, if you can buy a 911 Plus, you know, to be candid, are big believers that fall detection and personal safety should be, you know, available for everybody. Even our 911 Plus got an upgrade.
It's unmonitored, but it has fall detection as part of that feature because, again, fixed income, low income should not, you know, force you to be unsafe, right? We are believers in that. If you are using our product in the Mini, you can see, advanced sort of features and services. Because that we are connected, we're able to sort of OTA additional products and services on top of that. It doesn't become a product with a fixed service, not even a fixed recurring service, but fixed service overall. It's not as if you could just only get, fall detection for a Mini, but, you know, you can get, you could get geofencing.
As we're looking at rolling out new features, maybe activity tracker, you know, we may be able to sort of, you know, roll that service on top of the Mini and allow the users to not have to upgrade the hardware, but actually upgrade and purchase additional services. That's really the best scenario to be in, I think, for the consumers as well as for the company.
Mm-hmm. Okay. Thank you very much.
Thank you.
Thank you. At this time, I am showing no further questions in the queue. I would now like to turn it back to Chia-Lin Simmons for closing remarks.
Thank you so much, Michelle. To summarize, the first quarter provided a clear signal that the strategy we laid out is working. Revenue is growing, gross margin is solid, and operating expenses are declining even as we invest in the right places. Our product pipeline is on track, with the wearable watch on schedule for the third quarter and our connected home hub progressing through beta. Our IP portfolio continues to deepen, and our channels are expanding, and the demographic tailwinds behind aging in place are strengthening and not weakening. There's definitely more work ahead. Improving operational leverage, scaling our monitored and connected care revenue, and converting research and development investments into commercial outcomes remain the team's priorities over 2026. We are confident in the foundation we have built and in the path forward. Above all, we never lose sight of why this work matters.
Behind every device and every subscription is a family trying to keep a parent, a spouse, or a child safe. Our job is to give them dignity, independence, and peace of mind, and to do it with technology that fits naturally into the lives of the people who depend on it. As we close, I wish to thank our employees for their commitment, our customers and partners for their trust, and our shareholders for your continued support. We look forward to updating you again next quarter.
This concludes today's conference call. Thank you for participating, and you may now disconnect.